The coronavirus pandemic has put strains on everyone’s wallets.
A West Hartford mortgage company said there are plenty of moves you could make to free up cash, but, be careful.
Forbearance, where you can ask your mortgage servicer to let you put off your monthly payments, has been an option to free up funds.
However, loan consultant Scott Stoll from First World Mortgage warned, forbearance does not equal forgiveness.
“A lot of different banks have a lot of different qualifications. some, they add on a balloon payment after three months, some at the end of the loan, so it’s really important to get the terms, conditions, in writing, before you stop making your mortgage payment.”
Stoll suggests if you don’t want to try forbearance, only make the minimum payments for mortgage or credit card debt to keep your credit rating.
A good credit rating could enable you to refinance your home mortgage at a lower rate to free up cash, even if you or your spouse lost a job.
Stoll said just don’t assume it’s automatic.
“Just because you’re making your mortgage on time you still have to qualify for the refi. Just don’t assume ‘oh yeah I’m making my mortgage payment rate at the higher rate, so this lender’s gonna approve me.’”
Right now, broadly speaking, refinancing can bring you significant monthly savings, sometimes more than $100 per month. The key, according to experts, has been before you make a move with your home finances, do your research, and have some early conversations with your lender.